Forbes Cover Story: The Web3 Prom King Journey of an a16z Partner
How Chris Dixon's Dive Down The Crypto Rabbit Hole Made Him The World's Top Venture Capitalist
Alex Konrad, Forbes
TechFlow
Note: Recently, Forbes magazine released the latest "2022 Midas List", which was established in 2001. The model for the first eight years was to collect the portfolio data of global venture investors in the previous year and select the top 100 winners. The list, also known as the "goldfinger" list because of the Midas Midas myth, is known as the Oscars of the investment world.
In 2018, Shen Nanpeng, global managing partner of Sequoia Capital, topped the list, which is the first time for Chinese investors to top the list. Looking back, this is also the peak moment of China's Internet.
This year, the new top spot belongs to Andreessen Horowitz (A16Z) partner Chris Dixon, who joined A16Z in 2013 and invested in Ripple, Coinbase and others, betting on Coinbase in each subsequent round, Become its largest outside shareholder, holding a maximum value of tens of billions of dollars.
Not just Chris Dixon, but more than a dozen investors on this list count Coinbase as one of their major investments, placing it third among all companies.
Investors who invested in Coinbase
Today, Chris Dixon & NBSP; Has been the biggest driver of Web3 narrative, or,"He pioneered Web3"Here's an in-depth article from Forbes about how he jumped down the cryptocurrency rabbit hole.
The body of the
In 2013, Chris Dixon, a serial entrepreneur turned venture capitalist, was looking for the next big thing. In the 1980s it was the personal computer, in the 1990s it was the Internet and in the 2000s it was the mobile phone. After becoming a new partner at venture capital firm Andreessen Horowit Z, Chris Dixon pursued his moonshot projects -- virtual reality, 3D printing and drones.
However, it was Chris Dixon's commitment to cryptocurrency exchange Coinbase & NBSP that decided his career. Is an early bet. Chris Dixon The firm led a $25 million funding round for Coinbase in 2013. By April 2021 Coinbase & NBSP; For a direct listing, Andreessen Horowitz & NBSP; Has accumulated a position of nearly 30 million shares (15% stake) in 14 other rounds of funding.
At the end of Coinbase's first trading day, those shares were worth about $10 billion, a return of about 60 times. (The company has since sold some shares and is now trading at about half that price.)
Coinbase is one of the jewels in the portfolio, making 50-year-old Chris Dixon the new Number one on Midas' list.
Chris Dixon did a couple of other big deals,These include decentralized cryptocurrency exchange Uniswap ($10 billion fully diluted valuation, including tokens not yet in circulation), open source blockchain Avalanche ($62 billion), and NBA Top Shot creator Dapper Labs ($7.6 billion).
Chris Dixon splits his time between New York and California. He's one of the elder statesmen in the cryptocurrency space, and the man with the deepest pockets. Thanks to the success of the first cryptocurrency fund within A16Z, commonly known as Andreessen Horowitz because of the 16 letters between Andreessen's "A" and Horowitz's "Z," Chris Dixon and his team turned $350m into $6bn in (realised and unrealised) gains by the end of 2021, both for an eye-popping 17.7 times, according to a person familiar with the fund's finances.
The source told reporters. Chris Dixon and his team have raised new money in the market for what is said to be the largest cryptocurrency venture fund ever, reaching $4.5 billion. Andreessen Horowitz declined to comment on its performance or fundraising.
"He's the top cryptocurrency investor by any measure." Says Hemant Taneja, General Catalyst General manager (Midas is No. 23), who backed Chris Dixon's first startup 19 years ago. Chris Dixon's colleague and co-founder Ben Horowitz (Midas no. 87) goes further:"I think 10 years from now, everyone will consider him the greatest investor of his generation."
Chris Dixon himself rarely gives interviews, but he played down his "Midas touch" in an interview with Forbes. "It's not my job to predict the future," he said.My job is to be able to read people and know who's smart enough to predict."
Chris Dixon, the son of two English professors at Wittenberg University in Germany, grew up in Ohio and taught himself to code before tutoring others at a computer summer camp. An interest in cognitive science and logic drove Chris Dixon to pursue his BACHELOR's and Master's degrees in philosophy at Columbia University in the early 1990s.
Chris Dixon questioned capitalist enterprise from an early age and, despite his parents' objections, quickly took a job as a developer at a hedge fund, where the wages were the best. About three years later, he went to Harvard to get an M.B.A. and worked briefly at Bessemer Venture Partners.
He has since quit and co-founded his own company, SiteAdvisor, which warns against viruses and malware. Within a year, security giant McAfee gobbled up the business, which had no revenue.
Chris Dixon then co-founded an early recommendation engine called Hunch. Like SiteAdvisor, it was acquired by eBay in 2011 for about $75 million. In the process of building and selling both companies, Chris Dixon was exhausted. He had to choose whether to remain a solo investor, blogging and podcasting as his career, or be a proper venture capitalist.
While building Hunch, Chris Dixon had begun personally investing in other startups in the (then small) Tech scene in New York, some of which borrowed extra desks in Hunch's offices. Dixon's 50-plus personal investments include Kickstarter (2009), social sharing site Pinterest (2011) and online payments business Stripe (2012).
He also helped launch the Founder Collective, a seed-stage fund with which he invested alongside several other successful entrepreneurs as angel investors, Investors include David Frankel (Midas no. 11), Bill Trenchard (Midas No. 86) and Eric Paley (Midas no. 86).
But In the tech mecca of Silicon Valley, Chris Dixon is best known for his blog, which he launched in 2009. He shares strategic advice, personal thoughts and thoughts on big technology on his blog. Highlights of his blog, which is still active today, include a 2011 warning to the entertainment industry about Apple TV and an opinion defending NFT a decade ago.
While Chris Dixon is on record as saying that The Tech scene in New York will eventually take off, investing so far from California feels like he's on the sidelines. Luckily for him, Marc Andreessen and Horowitz, venture capital's loudest and most disruptive founders, are avid readers of Chris Dixon's blog and invited him west to join them. Chris Dixon remembers thinking,"That's how I can make a difference. I can find the next business and be part of it."
As for Chris Dixon's so-called frontier or "moonshot" investments, these have led him to invest in virtual reality startup Oculus, which was acquired by Facebook, drone company Skydio, and cryptocurrency company Ripple.
Through his investment in bitcoin mining startup 21.Co, founded by former A16Z partner Balaji Srinivasan, Chris Dixon spoke to his reader Brian Armstrong, co-founder of Coinbase, Got a chance to back Coinbase.
Brian Armstrong said the three talked for four hours in 2013 and found common ground on cryptocurrency regulatory compliance. In December of that year, Chris Dixon led Coinbase's Series B round, joining a group of investors that included investor Garry Tan (Midas No. 28) and USV partner Fred Wilson (Midas No. 73).
Brian Armstrong told Forbes in an email,Over the next few years, Andreessen Horowitz & NBSP; Is the only company that has refinanced in every round, including the "next round" at a lower valuation.
Chris Dixon has proved instrumental in everything from securing board members and bank partners to advocating for Coinbase to increase its support for trading ethereum and other non-Bitcoin assets. Brian Armstrong said,"I can confidently say that A16Z is Coinbase's most influential investor. Chris has a unique ability to see around the corner, especially when it comes to technology and what's going to be built next."
In 2018, they planted some of the first high profile flags in this emerging space when Chris Dixon worked full-time on a16Z's first fund to invest in cryptocurrencies. Today, Dixon and his team face increasing competition -- both from generic venture capital firms that are allocating more resources to cryptocurrency investments, and from specialized rivals such as Paradigm, which was co-founded by Coinbase's other founder Fred Ehrsam.
But Chris Dixon's dedication to cryptocurrencies, and his willingness to persevere through the downturn, still carries a unique weight. Hayden Adams, CEO of Uniswap, the mainstream decentralized trading platform backed by Chris Dixon during The Series A period (one round after Paradigm), said, & NBSP;Chris Dixon's ability to connect the traditional tech and financial world with cryptocurrencies has been demonstrated by hiring a COO from Black Rock and snapping up a VP of engineering from Snap.
Roham Gharegozlou, CEO of Dapper Labs, credits Chris Dixon with predicting the rise of NFTs. His company created the first CryptoKitties in digital collectibles on the Ethereum blockchain.Chris Dixon grabbed Kitty No.15 at the time, "Chris saw the industry before it started."Gharegozlou said.
Such credentials are invaluable in an industry that values early adoption and strong convictions. That means Chris Dixon could easily raise billions of dollars for his company on his own if he wanted to. Haun Ventures partner Katie Haun, for example, recently left the firm and went on to raise a $1.5 billion private general partner fund. For now, Chris Dixon and his colleagues and friends insist he has no interest in striking out on his own.
"Starting my own business is not what drives me. The next three years could be the golden age [of cryptocurrencies] for me. So I really don't want to spend the next two years setting up everything, recruiting a team, and all that kind of stuff."
Instead, multiple sources told Forbes that Chris Dixon and A16Z have been telling investors that they plan to eventually convert the A16Z cryptocurrency back into the company's central fund. Sources say the move is significant and reflects the broad buy-in of Web3 across the company, the crypto strategy (and ubiquity), and cannot continue to be isolated from one fund. A spokesman for Andreessen Horowitz declined to comment on the rumors.
Bringing cryptocurrencies more widely into the mainstream is. Chris Dixon I'm trying to solve. Last September, Chris Dixon created a Twitter sensation with a post detailing "why Web3 matters."
In December of that year, his advocacy of Web3's promise of a decentralized Internet and more direct user ownership, which he believes is currently missing from "Web2 "Internet companies such as Facebook or Twitter, landed him on the radar of Twitter co-founder Jack Dorsey.
Jack Dorsey, who was no longer Twitter's chief executive at the time, tweeted: "You [A16Z] are a fund determined to be a media empire that cannot be ignored... not Gandhi." He thinks Web3 will still be owned by individuals, but this time by VCS.
The row ended with Andreessen blocking his fellow billionaire on Twitter; Chris Dixon didn't do that, but he blocked the others. Dixon now says he "may have overreacted," citing a line that was trending on Twitter:Twitter's game is not to be the star of its day, and in this case, he lost.
Colleagues say That Chris Dixon took the attack to heart, and that he was acting on behalf of entrepreneurs with little influence against such online personalities. "I think he can be a little rough or stuffy at times, but it's really from the best of intentions." Arianna Simpson, cryptocurrency partner at A16Z.
Chris Dixon now offers a more measured view of Jack Dorsey and any other technology leaders who question the decentralized potential of Web3. "My response was, 'Hey, great, come and join us and help us solve these problems.' As opposed to that, I think there was going to be a grenade thrown [at me] from the side." He said.
It's hard for the world's number one investor to cry underdog, but Chris Dixon insists that the industry and its potential are misunderstood when people claim cryptocurrencies are "just a gamble for tech bros to get rich".
Chris Dixon plans to spend more time in Los Angeles this year meeting with tastemakers and creators in the entertainment industry,Advertise Web3's potential for more direct ownership of content, and then bring musicians and others to Washington, D.C., to help win over policymakers.
Of course, this wider acceptance of cryptocurrencies will only increase the value of the sizeable portfolio owned by Chris Dixon. But he insists that simply driving Midas-like returns is not the only goal.
"We're a VC and I'm not going to pretend we're not VCS. But I would say I'm motivated because I think [Web3] is a really important movement and I want to have an impact on it and I believe deeply in it."He said.
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